Research firm IDC raised its forecast for full-year global smartphone shipments on Tuesday, citing strong growth in the first half of the year as consumer electronics demand recovers and artificial intelligence features attract buyers.

IDC expects shipments to grow 5.8% to 1.23 billion units in 2024, up from its previous forecast of 4% growth to 1.21 billion units.

WHY IT'S IMPORTANT

In an uncertain economy where price-conscious consumers typically hesitate to make big purchases, the forecast raise suggests that the new AI features might boost demand in key markets like the U.S. and China, which is recovering after a prolonged slump.

KEY QUOTE

"Although GenAI smartphones are relatively new in the market, premium flagships will continue to adopt GenAI features to help separate them from the pack," said Anthony Scarsella, research director with IDC's Worldwide Quarterly Mobile Phone Tracker.

CONTEXT

Apple is set to hold its fall event on Sept. 9 at its headquarters in Cupertino, California, where it is expected to unveil new iPhones, as it looks to reverse a global sales slowdown, particularly in China.

At its developers conference in June, Apple unveiled a series of AI features for its operating system under the name "Apple Intelligence".

Earlier this month, Alphabet's Google also announced its new line of Pixel smartphones with deep AI integration.

BY THE NUMBERS

IDC predicts GenAI smartphones will surge 344%, capturing 18% of the market by the end of 2024 as more flagships adopt built-in generative AI features for daily use.

The firm projects Apple's iOS growth trajectory to improve in 2025 with 4% year-over-year growth, thanks to Apple Intelligence.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Tasim Zahid)